writing, writing and self-promoting

Bell Claims Playboy Bid Imminent … But with What Money?

Maybe it’s the fact that I went to public school … or I’m just plain stupid. I just can’t understand how Marc Bell, CEO of Penthouse Media Group Friend Finder Network, is going to make a bid on ailing quasi-competitor Playboy this afternoon. He just doesn’t have the money.

At the beginning of the year, Bell announced that he was desperately trying to take FFN public – his second attempt at recapitalizing the over-leveraged debacle. In 2008, he tried for the first time, having seen more than $400 million in long-term debt reclassified as short-term debt likely because of a busted loan covenant. The only reason FFN hasn’t collapsed, I suspect, is because the investors just have too much capital committed.

FFN’s problems began back in 2007, when it was still Penthouse, and Marc Bell led the acquisition of Various, Inc. for the princely sum of $401 million. Credit markets were still a bit loose, and PET, the fund that pumped cash into Penthouse when Bell took the company over from Bob Guccione, was able to load up to acquire Various, which was much larger than Penthouse. Various owned, well, various dating sites, including FriendFinder.com and AdultFriendFinder.com.

Ultimately, the combined company, under Bell, couldn’t carry the burden, screwed up its payments and tried to go public. It limped along and tried again.

And now, it’s trying to by Playboy – a stupid acquisition even if Penthouse had money.